ATHENS— Greece is addicted to expensive medicines, and three rounds of rehab have made only a small dent.

It’s a hard habit to kick: Greece for years lavished unusually high sums on the newest, most expensive drugs on the market. That led the European Commission to zero in on this, saying Athens would have to spend smarter to help cut its budget deficit. In the third bailout agreement between the European Commission and Greece, Brussels called on the Greek government to ensure that 60 percent of medicines are cheaper, copycat versions — so-called generics — by March 2018.

Only a quarter of medicines prescribed in Greece are generics, according to the European Commission, putting Greece at the bottom of the charts, ahead of Italy and Luxembourg but behind countries like Germany and the Netherlands, which have penetration rates of 81 percent and 71 percent for generics, respectively.

To usher the reforms through, the Greek government needs to face down opposition from powerful vested interests: pharmacies that make a killing from selling the more expensive original drugs and many specialist doctors who receive incentives from drugmakers to prescribe the latest name-brandmedicines.

“Nobody else has ever implemented such heavy health care reforms in such a short amount of time,” said Nikos Maniadakis, a professor at the National School of Public Health in Greece.

Athens will have to overcome resistance to reform from its domestic drugmakers and, perhaps most sensitive of all, a deep suspicion among Greek patients that generics are simply inferior.

“Greeks consider generics a second-class medicine due to a law in 2012 that said the poor people get generics,” said Pascal Apostolides, president of the Hellenic Association of Pharmaceutical Companies (SFEE), which represents multinational drugmakers in Greece.

The country has been making some slow progress in response to the pressure from Brussels. Generics penetration has risen 10 percentage points since 2010 and the Commission broadly argues that it is “proud of the progress” in the Greek health care sector.

In need of reform

In 2010, when the financialcrisis hit, Greece’s medical system was already idiosyncratic and dysfunctional.

On the one hand, it had the highest number of doctors per capita in the EU and pharmacies at every street corner. But the system was hardly functioning well: Patients paid almost 40 percent of health care costs from their own pockets.

These costs were a debilitating weakness from both an economic and humanitarian perspective. When Greeks lost their jobs and subsequently their health insurance, many couldn’t afford life-saving medication.

Only a quarter of medicines prescribed in Greece are generics, according to the European Commission | Louisa Gouliamaki/AFP via Getty Images

Martha Frangiadakis, a volunteer at a free clinic in Athens, where doctors and pharmacists volunteer and which runs on in-kind donations, gave a stark example of the personal sacrifices that were commonplace at the height of the crisis. She described how one man came to ask for Glivec, a cancer drug that costs €3,000 per course, that he could no longer afford. The clinic put out a call and another man suffering from cancer offered to share some of his own medication. That was the only way some people could survive.

The left-wing Syriza government tried to combat these problems by passing a law last year to give health care access to those who had no insurance, but the move piled more pressure on the health system. The extra strain meant some method to contain drug costs became more vital than ever.

As Greece looks toward its exit from EU oversight next year, when the third — and many hope final — bailout agreement ends, Athens still has a lot of work to do to ensure its health system stands on its feet.

Pharmacies and doctors in the crosshairs

Greece will need far more aggressive surveillance of its pharmacies and doctors if it wants to whittle the costs down and accelerate the transition to generics.

Greece’s tightly regulatedpharmacies were quickly identified as a problem in the early days of the crisis, because they were widely accused of being wedded to expensive drug brands. In the first bailout agreement, the European Commission, the European Central Bank and the International Monetary Fund asked the Greek government to remove restrictions on who can open a pharmacy to create more competition. The troika also wanted Greece to introduce an electronic system to monitor doctors’ prescriptions to increase the uptake of generics.

Seven years later, many of these demands have been met on paper, but are failing to make much difference in practice.

Laws to shake up the pharmacist profession to increase competition and allow supermarkets to sell nonprescription drugs have been passed, but are not yet fully implemented.

The Greek government made drugmakers offer a bigger discount to pharmacies so they would have incentive to sell more generics. This measure, which passed in mid-May, was part of implementation of the third bailout agreement and was required for Greece to unlock a new round of cash.

Theodore Tryfon, the president of the Panhellenic Union of Pharmaceutical Industry (PEF), which represents Greek companies producing mainly generics, insisted that this would not change anything. The margins pharmacists make from selling brand name drugs would still be bigger than the discounts they receive for selling more generics, he said.

Greece’s early experiments with e-prescriptions to rein in overprescribing and promote generics were also unsuccessful.

In 2014, the Greek government imposed a maximum expenditure limit on drug prescriptions by doctors and asked them to prescribe generics in at least 60 percent of cases. “If the doctor did not cover this percentage, he was expelled from the system of e-prescription,” meaning the doctor couldn’t legally prescribe drugs at all, said Michail Vlastarakos, the president of the Panhellenic Medical Association, which represents Greek doctors.

The drugmakers, both local and international, are also angry about the level of extraordinary payments they have to make in Greece.

His association brought the measure to the Supreme Court, which in 2016 struck down the 60 percent threshold.

In a second attempt to control what doctors prescribe, the Greek government in May introduced a set of detailed rules that doctors have to follow when prescribing medicines.

Local vs global

The Greek government’s other big headache is its need to strike a balance between the international and the domestic pharmaceutical industry. While it is under pressure to support domestic champions, it also has to maintain good ties with the multinational companies that produce new drugs for illnesses such as hepatitis C.

Both sides of the industry blame each other for the low penetration of generics.

By law, generic medicines should cost a maximum of 65 percent of the price of original drug that has lost its patent, but the multinational companies’ lobby SFEE complains that some generics are still much more expensive than that. In fact, Greece has the most expensive average price for generics in the EU. That’s because the government doesn’t want to harm local pharma companies, which remain one of the few successful industries in the country, contributing almost €3 billion a year to its economy, according to two sources who would only speak on condition of anonymity.

But Tryfon, of the generics’ lobby, warned that ultra low drug prices could also backfire.

He explained low prices for some drugs would undermine the market and hurt patients because drugmakers would stop selling them in Greece if they don’t turn a profit anymore. This, in turn, would lead to more expensive medicines taking their place on the shelves and patients not having a choice between a cheap or expensive option.

The drugmakers, both local and international, are also angry about the level of extraordinary payments they have to make in Greece. For all of the country’s expenditure on drugs that goes over €2 billion a year, drug companies must offer paybacks and rebates. The amount collected from drugmakers every year is now spiraling out of control, rising from €271 million in 2012 to €1 billion in 2016, the pharmaceutical companies say. Effectively the drug companies are paying for a third of medicine usage in the country.

The idea of forcing drug companies to make paybacks and rebates was to stop them from incentivizing doctors to prescribe too many expensive drugs, according to a Commission official.

But this hasn’t worked. Despite the pressure on the drugmakers, doctors have still been signing off on high volumes of drugs to patients, and drugmakers say the number of prescriptions has gone through the roof. They would like the government to look into why the number of prescriptions went from 4.5 million a month in 2010 to 6.5 million a month in 2017, for example.

All these failures have made many Greeks lose hope in having a properly functioning health care system in the near future.Apostolos Veizis, director of the medical operational support unit at Doctors Without Borders, said: “I don’t see the light at the end of the tunnel. There’s no hope in this country.”

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Ronald Grünebaum

Greece does not even pick the low hanging fruits. Corruption is still the norm and not much is done about it.

I just wonder whether Greeks have any self-respect. Begging for cash year after year instead of cleaning up the mess would feel humiliating for normal people.

Posted on 7/4/17 | 10:33 AM CET

Chris

I think the issue is regulation that stops Supermarkets selling simple over-the-counter drugs. For example, in the UK you can get two weeks hayfever treatment for a pound by going to your nearest pound shop. In Italy, which has lower share of generics than Greece, you need to go to a pharmacy and you will pay 5 times as much for the same medicine.

Posted on 7/4/17 | 11:11 AM CET

FierEuropeen

This is just one more facet of the Greek dysfunctional government and society, that led to the Greek debt crisis. It’s this soup of Greek corruption and ignorance that has to change asap. Above all, for the good of the Greek people. In the meantime, the rest of the EU taxpayers will be paying the Greek bills.

Posted on 7/4/17 | 1:22 PM CET

Eleftheria Pappa

The author of this piece is evidently clueless about the role pharmacies play in public health in Greece. She discerbs economic motives in the EU prescriptions, but as a journalist (?) completely fails to test these clsims against realities. Impressionable phrases such as “make a killing” sketch out a phantastical landscape, in zero communion with reality, which is that often pharmacies in Greece provide medivines without receiving their costs back from faltering -thanks to the EU- insurance funds. I would suggest that you put more integrity into what you publish, and when it comes to health, try to remember that not everything is about money.

Posted on 7/4/17 | 3:41 PM CET

Ronald Grünebaum

@E.Pappa

If Greece is so damn special why does it insist to be in the EU?

Pharmacies are there to dispense prescription pharmaceutical. If there is some special social role I would like to know, including how Greece is going to pay for it. And if you need to know how to organise health insurance just look at any other EU country. Nobody shares Greece’s problems.

Posted on 7/4/17 | 9:53 PM CET

Jodocus5

I think the article highlights one of the benefits of the EU: allowing cross-country comparison so as to push individual countries to adopt best practice.

Corruption and nepotism is, to a certain extent, present in each and every society, but is relatively prevalent in Greece.

That’s not a reproach, it’s something that’s evident. As the article notes, it’s a significant factor in the Greek pharma sector.

Add to that the bad press that generics receive. This is one of those cases where the market mechanism gives absolute know-nothings (patients) a significant role in brand-buying decisions (specialties versus loco’s)., which is of course exploited to the hilt by pharma companies and doctors who’d like to supplement their income.

Left to itself Greece would probably be hard put to improve that situation. Good examples (the Dutch, German, and UK prescription practice) and external pressure (EU scrutiny of Greek spending) combine to improve Greek practice a lot faster than it could ever have done by itself. This is one of the many benefits of the EU that rarely gets highlighted or even considered. But it is real nonetheless.

The pharmaceutical industry is quite pernicious about selling the very same drug at wildly varying prices across the US, Japan, and Europe. It’s simply charging whatever the market will bear. It’s up to the market (i.e. public health authorities) to be less inept and stupid at buying.

Those worried about the pharmaceutical industry’s ability to conduct research for new drugs might consider that it’s generally known that pharmaceutical companies tend to spend more on marketing than on R&D.

On the other hand, market potential is most certainly driving R&D efforts. Non-lucrative drugs such as antibiotics are under-researched whereas lucrative gastric drugs are over-researched. It suggests to me that the public sector should play a greater role in pharmaceutical R&D.

Posted on 7/4/17 | 10:19 PM CET

Adam Russell

“Greeks consider generics a second-class medicine due to a law in 2012 that said the poor people get generics,”

Well, if you are depending on the government to pay for your medicine then YOU’RE POOR. Get over it. When you start paying your own way then you can put on airs.

Posted on 7/4/17 | 11:13 PM CET

JP

Greeks should flip the Europeans the bird and default on their loans. That way they can get back to restructuring their economy and looking out for Greeks. Haven’t you Greeks had enough of that German boot on your throats. Start acting like Spartans not pussies with your tails between your legs.

Posted on 7/4/17 | 11:49 PM CET

Peter

Clueless journalists as usual. Data points on actual prices in Greece versus rest of world? Any pricing points at all or just general statements of no real worth?

If you had bothered you would discovered that meds in Greece are already priced to market and as such very cheap globally speaking. Nothing to be had here but some blood from a stone. Good luck.

Posted on 7/5/17 | 5:21 PM CET

Anglia

Ronald Grünebaum jumped on the bandwagon set in motion by the Bild-Zeitung , the FAZ and the Focus online which relentlessly pursues the line that feckless lazy Greeks are only looking for debt forgiveness to make legitimate their idleness.
Enough is enough! If you want to fix the Euro you need Eurobonds and a Hamilton like solution with a Euro federal budget. Blaming alone the Greeks for everything it wont help the Euro.

Posted on 7/5/17 | 8:45 PM CET

Dude

This article was highly informative from an american doctor’s perspective. We have relatively high rates of generic penetration yet double the total healthcare costs of the UK. That won’t change soon. Healthcare perceptions and cultures are highly resistant to change. Over prescribing and over testing and excessive procedures are the accepted norm among patients here. They will pay 40 percent or more of the healthcare costs themselves (just like in Greece) if one doctor say “you don’t need that,” but the doctor down the street is happy to provide that test or procedure if you are willing to pay just a little more.

Posted on 7/6/17 | 12:20 AM CET

Steve Simon

Well, Greece just legalized medical marijuana… I guess we’ll see what that does.

So the cost high of generics is entirely a due to protectionist policies? Sounds like there is also an issue with the Common Market. I know there are good reasons to exempt drugs under patent protections from it, but it seems to me that generics should be another story.

Posted on 7/6/17 | 5:06 PM CET

Tmeg4

This is a suspect article, because Greece has managed to cut the cost of healthcare down to 8% GDP, while the usual cost in most european states is at around 10-11% (and a massive 17% in the US). And this while still providing an acceptable level of quality in healthcare (20th in the world according to Lancet’s ranking – above countries like Germany for example).

Posted on 7/6/17 | 10:32 PM CET

Prodromos

Just a minor correction. Uninsured citizens had access to the healthcare system already from 2014 when new democracy was in power.